THE Croatian army is winning ground in Bosnia and is poised to

recapture territory lost to rebel Serbs at home, forcing a slim chance

of a breathing space in the crisis.

With this sudden switch in the balance of the fighting, the United

Nations last night announced an agreement it hopes could prevent the war

from spreading to Croatia.

But Croatia immediately served notice that it wanted top-level

negotiations on its own terms or ''all other options are possible''.

One of Croatia's demands is negotiations on restoration of Zagreb's

authority in the breakaway lands -- something the Serbs have vowed never

to accept.

Even Yasushi Akashi, the top UN official in former Yugoslavia, who led

the the UN delegation at the five-and-a-half hour meeting, was cautious.

''The danger of the full-scale war starting in the next several days

or weeks cannot be excluded yet. This is the time for the maximum

restraint on all sides,'' he told reporters at Knin, the rebel Serb

stronghold in Croatia.

Croatian Serb leader Milan Martic headed his side's delegation. Also

there was UN Commander General Bernard Janvier.

The accord amounted to a big concession by the Serbs. It was not

immediately clear whether it was just a Serb ploy to buy time to regroup

forces or whether Croatia, whose troops captured large swathes of

Serb-populated western Bosnia and cut a supply route to Knin, would do

anything in return.

While this was happening, a Labour MP infuriated his colleagues by

holding talks with Radovan Karadzic, the Bosnian Serb political leader

who is accused of war crimes.

Mr Bob Wareing, MP for Liverpool West Derby, had gone to the isolated

Bosnian Serb capital of Pale for the meeting.

He is also thought to be planning to talk to the Serb military chief,

General Ratko Mladic, who has been described as the Butcher of Bosnia.

The two men top the United Nations wanted list of suspected war

criminals. They have been indicted by the international community for

ordering atrocities against civilians.

Mr Wareing, who was accompanied by Tory peer and landowner Lord

Harlech, spent more than four hours in talks with Dr Karadzic. The talks

were reported to have touched on the possibility of an international

conference to search for a political solution across the whole of the

former Yugoslavia.

The Labour MP, long known for his pro-Serb views, appears to have

departed without informing either the Labour leadership or his

constituency party of his full schedule.

He left on Saturday on a trip that is to include meetings with

commanders of British troops serving with the UN and an attempt today to

visit the beleaguered Bihac pocket.

Labour leader Tony Blair officially distanced himself from the visit

but refused to issue an outright condemnation of the long-serving back


A spokesman said: ''Mr Blair is unaware of the visit. If it has taken

place, it is on Mr Wareing's own initiative.''

Rank-and-file Labour MPs denounced Mr Wareing, 64, as ''amazingly

stupid'' and ''completely and utterly wrong''.

They were unable to hide their anger at what they believed was an

ill-conceived mission.

Mr David Winnick, the Walsall North MP, who has consistently spoken

out on behalf of the Bosnian government, said: ''There is no way any

democratic socialist should be shaking the hands of such

fascist-communist butchers.''

Ms Kate Hoey, secretary of the all-party Bosnia group, dismissed Mr

Wareing as ''crazy'', adding: ''What he does as an individual MP is up

to him. I think he has been amazingly stupid but he does not speak for

anybody and he is not there on behalf of anybody.''

Mr Calum Macdonald, MP for Western Isles, said: ''It is utterly and

completely wrong for any British parliamentarian to be consorting with

indicted war criminals like Mladic and Karadzic at this time.''

Tory MP Lady Olga Maitland, secretary of the all-party British

Yugoslav group and herself of Serbian descent, said Mr Wareing had gone

with the best intentions but was ''misguided'' and risked being used as

a propaganda tool.

The Foreign Office was publicly relaxed about the visit, although a

spokesman said it had not been aware that talks with Dr Karadzic and

General Mladic were on the agenda.

Fast-moving events on the ground led to the tentative accord between

Croatia and the Serbs. Before it was announced, Croatia sent more troops

to the front-line after its president, Franjo Tudjman, vowed to

recapture territory lost to rebel Serbs in 1992 unless they agree to

negotiate on his terms. He proposed negotiations in Geneva.

Some 1300 Croatian Serbs pulled out of an assault against the

north-western Government-held Bihac enclave in Bosnia and moved to

defend their territory in Croatia.

Under the accord, Croatian Serbs agreed to refrain from any offensive

action against Croatia if they are not provoked. Croatian Serbs expect

Bosnian government forces to refrain from attacking them across the

border, the accord said.

The Croatian Serbs also agreed to halt all military action in Bihac.

But the accord makes no mention of their allies, the Bosnian Serbs and

rebel Muslims, who also have been attacking Bihac.

Showing the fragility of any accord, the Croatian Serbs unleashed

intense shelling yesterday about about 15 miles north of Bihac.

Croatia has sent thousands of troops across the border into Bosnia

where they joined forces with Bosnian Croats and seized two strategic

towns, Grahovo and Glamoc, from the Bosnian Serbs.

The Bosnian Serbs, reeling from last week's loss of the two towns,

appealed to Serb-dominated Yugoslavia for help.

The Yugoslav government sharply condemned Croatian army activity in

Bosnia. It called for an ''immediate and unconditional'' ceasefire. But

it stopped short of promising military aid.

Fighting also continued today around the village of Strmica, between

Grahovo and Knin, the Croatian Serb stronghold, on the Croatian-Bosnian

border. Croats started shelling the town on Friday, indicating they

might move toward Knin, about nine miles away.

The Croatian army's move into the Bosnian war followed agreement a

week ago between the Bosnian and Croatian governments to increase

military co-operation, particularly around Bihac.

Under yesterday's agreement, Croatian Serbs would allow humanitarian

convoys to Bihac. The Croatian Serbs were also promised some

humanitarian aid.

* France and Britain swept aside military differences at talks in

Paris in an attempt to kick-start the political process in Bosnia. The

Prime Minister and French President Jacques Chirac sealed a renewed mood

of co-operation over an informal lunch at the Elysee Palace.

John and Norma Major stopped off in Paris on Saturday on the way to a

holiday in the south of France.

Mr Chirac later announced a ''great convergence of views'' across the

board but particularly on Bosnia.

* The latest British additions to the United Nations Rapid Reaction

Force in Bosnia were arriving in the former Yugoslavia yesterday. The

advance party of 44 officers and men from the 24 Airmobile Brigade,

based at Colchester in Essex, will prepare for a mass deployment next

week of more than 4000 British troops to the area.